(Managed by Alawwal Invest Company, previously known as Saudi Hollandi Capital Company) UNAUDITED INTERIM FINANCIAL STATEMENTS 30 JUNE
INTERIM BALANCE SHEET As at 30 June Note 30 June 31 December (Audited) 30 June ASSETS Bank balance 26,008 141,357 62,871 Trading investments 4 10,681,150 11,648,870 12,726,008 10,707,158 11,790,227 12,788,879 LIABILITY Accrued expenses 33,360 63,918 31,787 NET ASSETS 10,673,798 11,726,309 12,757,092 Units in issue 834,266 934,372 1,014,378 Per unit value 12.7942 12.5499 12.5763 The accompanying notes 1 to 8 form an integral part of these interim financial statements. 2
INTERIM STATEMENT OF OPERATIONS For the six-month period ended 30 June Note INVESTMENT INCOME Trading income, net 5 258,843 115,085 EXPENSES Management fees 6 (16,371) (31,585) Other expenses (31,699) (31,615) (48,070) (63,200) NET INCOME FROM OPERATIONS 8 210,773 51,885 The accompanying notes 1 to 8 form an integral part of these interim financial statements. 3
INTERIM STATEMENT OF CASH FLOWS For the six-month period ended 30 June OPERATING ACTIVITIES Net income from operations 210,773 51,885 Adjustment for: Unrealised losses (gains) on trading investments 218,525 (299,307) 429,298 (247,422) Changes in operating assets and liability: Trading investments 749,195 813,379 Accrued expenses (30,558) 31,787 Net cash from operating activities 1,147,935 597,744 FINANCING ACTIVITIES Bank overdraft - (260,329) Proceeds from sale of units 144,025 68,775 Value of units redeemed (1,407,309) (343,319) Net cash used in financing activities (1,263,284) (534,873) (DECREASE) INCREASE IN BANK BALANCE (115,349) 62,871 Bank balance at the beginning of the period 141,357 - BANK BALANCE AT THE END OF THE PERIOD 26,008 62,871 The accompanying notes 1 to 8 form an integral part of these interim financial statements. 4
INTERIM STATEMENT OF CHANGES IN NET ASSETS For the six-month period ended 30 June NET ASSETS AT THE BEGINNING OF THE PERIOD 11,726,309 12,979,751 CHANGES FROM OPERATIONS Net income from operations 210,773 51,885 CHANGES FROM UNIT TRANSACTIONS Proceeds from sale of units 144,025 68,775 Value of units redeemed (1,407,309) (343,319) Net change from unit transactions (1,263,284) (274,544) NET ASSETS AT THE END OF THE PERIOD 10,673,798 12,757,092 UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarised as follows: Units Units UNITS AT THE BEGINNING OF THE PERIOD 934,372 1,036,130 Units sold 11,425 5,673 Units redeemed (111,531) (27,425) Net decrease in units (100,106) (21,752) UNITS AT THE END OF THE PERIOD 834,266 1,014,378 The accompanying notes 1 to 8 form an integral part of these interim financial statements. 5
NOTES TO THE INTERIM FINANCIAL STATEMENTS At 30 June 1 GENERAL Al Yusr Mizan Multi Asset Fund (the Fund ) is a Sharia-compliant open-ended Saudi Riyal denominated investment fund of funds created by an agreement between the Alawwal Invest (the Fund Manager ), a subsidiary of Alawwal Bank (the Bank ) and investors in the Fund (the Unit Holders ) and is designed for medium risk Unit Holders seeking long term capital growth. The fund is governed by the terms and condition of its prospectus dated 01 March. The Fund invests in Sharia compliant investment funds (sub-funds) of the Fund Manager and other mutual funds licensed by Capital Market Authority (the CMA ) with exposure to equities and low risk investments. All income is reinvested in the Fund and is reflected in the unit price. The Fund commenced its operations on 8 Sha aban 1424H (corresponding to 4 October 2003). The books and records of the Fund are maintained in Saudi Riyals (). 2 REGULATING AUTHORITY The Fund is governed by the Investment Fund Regulations ( the Regulations ) issued by the CMA on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) and effective from 6 Safar 1438 (corresponding 6 November ) by the New Investment Fund Regulations ( Amended Regulations ), published by the Capital Market Authority on 16 Sha aban 1437H (corresponding to 23 May ), detailing requirements for all funds within the Kingdom of Saudi Arabia. The enhanced requirements of Annexure 5(e) of the Amended Regulations are effective from. 3 SIGNIFICANT ACCOUNTING POLICIES These interim financial statements have been prepared in accordance with the accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants (SOCPA). The significant accounting policies used in the preparation of these interim financial statements are consistent with those used and disclosed in the annual financial statements for the year ended 31 December and are as follows: Accounting convention The interim financial statements are prepared under the historical cost convention modified to include the measurement at fair value of trading investments. Investment valuation Trading investments in mutual funds are valued at the net asset value as announced by asset managers. Unrealised gains and losses on the revaluation and realised gains and losses on the disposal of investments are included in the interim statement of operations. Investment transactions Investment transactions are accounted for as of the trade date. Revenue recognition Special commission income is recognised on an effective yield basis. Realised gains and losses on investments sold are determined on an average cost basis. Trading income includes all gains and losses from changes in fair value and related dividends from trading investments. Zakat and income tax Zakat and income tax are considered to be the obligation of the Unit Holders and are not provided in the accompanying interim financial statements. Expenses Expenses are recognised based on the accrual method. Foreign currencies Transactions in foreign currencies are translated into Saudi Riyals at the rates of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the interim balance sheet date are translated at the rates of exchange ruling at that date. Resulting exchange gains and losses are taken to the interim statement of operations. 6
NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 4 TRADING INVESTMENTS The composition of the investment portfolio on the last valuation day of the period is summarised below: Description 30 June Cost Market value Units in Mutual Funds managed by the Company Al Yusr SAR Morabaha Fund 3,689,202 3,871,751 Al Yusr Global Equity Fund 2,320,422 3,058,050 Al Yusr Saudi Equity Fund 819,003 772,339 Al Yusr GCC Equity Fund 493,333 605,456 Al Yusr IPO Fund 368,533 346,764 7,690,493 8,654,360 Units in fund managed by Samba Capital & Investment Management Company International Trade Finance Fund (Sunbullah Saudi Riyal) 1,890,000 2,026,790 9,580,493 10,681,150 31 December (Audited) Units in Mutual Funds managed by the Company Al Yusr SAR Morabaha Fund 4,875,447 5,072,345 Al Yusr Global Equity Fund 2,320,422 2,836,498 Al Yusr Saudi Equity Fund 819,003 781,697 Al Yusr GCC Equity Fund 493,333 600,834 Al Yusr IPO Fund 368,533 352,168 8,876,738 9,643,542 Units in fund managed by Samba Capital & Investment Management Company International Trade Finance Fund (Sunbullah Saudi Riyal) 1,890,000 2,005,328 10,766,738 11,648,870 30 June Units in Mutual Funds managed by the Company Al Yusr SAR Morabaha Fund 4,625,127 4,789,010 Al Yusr Global Equity Fund 2,538,332 3,035,832 Al Yusr Saudi Equity Fund 1,390,789 1,316,251 Al Yusr GCC Equity Fund 875,967 1,023,570 Al Yusr IPO Fund 600,011 584,068 10,030,226 10,748,731 Units in fund managed by Samba Capital & Investment Management Company International Trade Finance Fund (Sunbullah Saudi Riyal) 1,890,000 1,977,277 11,920,226 12,726,008 7
NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 5 TRADING INCOME, NET For the six-month period ended 30 June Unrealised gains 218,525 299,307 Realised gains (losses) 40,318 (184,222) 258,843 115,085 6 TRANSACTIONS WITH RELATED PARTIES The Fund is managed and administered by the Fund Manager. For these services the Fund pays a service fee calculated at an annual rate of 0.5% of the net asset value at each valuation date. The Fund Manager also charges a subscription fee of 0.5% each on gross subscriptions and a redemption fee of 0.5% on redemptions within a month of subscribing, which is reinvested in the Fund. Other expenses paid by the Company on behalf of the Fund are reimbursed from the Fund. The Bank acts as the Fund s banker and the Fund Manager acts as the custodian of the Fund s investments. 7 LAST VALUATION DAY The last valuation day of the period was 30 June (: 30 June ). 8 RESULTS OF OPERATIONS The results for the interim period may not be indicative of the annual operating results. 8